Mortgage lending in Ukraine never recovered after the real estate bubble popped in the wake of the 2008 financial crisis. As a result, development projects throughout the country have stood empty, with young families simply unable to take out decade-long loans at double digit rates. This, in turn, has depressed construction, a major driver of economic growth.
Hence the idea of government subsidies to bring down the costs for prospective buyers. Under the program, the state would reimburse 13 out of the total 16 percent interest rate charged on mortgages for people in need of accommodation. Here “in need” means anyone living in a dormitory, or having less than nine square meters of living space per family member.
But the program is by no means for the poor. A person subscribing for the program should have enough savings to cover 25 percent of the property’s value upfront. Families should have combined incomes of at least Hr 15,000 ($1,850), as monthly payments should not exceed 50 percent of their earnings.